Strategic Management Principles and Concepts

This assignment delves into the core principles and concepts of strategic management. It examines various aspects such as risk management, competitive advantage creation, and the role of innovation in organizational strategy. Students will analyze provided resources and readings to understand how companies apply these principles in practice.

Strategic management :phase 1 and
phase 2
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PHASE 1- Strategic Analysis of the WRSX Group should include the following sections............3
1. The environment......................................................................................................................3
2. WRSX and industry strategic capabilities...............................................................................5
3. Strategic purpose......................................................................................................................6
4. Cultural and its impact on WRSX strategy..............................................................................6
5. Environmental..........................................................................................................................7
Conclusion...................................................................................................................................7
PHASE 2- STRATEGIC CHOICES ..............................................................................................8
Business strategy .........................................................................................................................8
Corporate strategy........................................................................................................................9
International strategy...................................................................................................................9
Innovation and entrepreneurship..................................................................................................9
Mergers, acquisitions and alliances...........................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12
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INTRODUCTION
In order to succeed in the competitive environment it is required by the company to focus
on analysing the internal and external environment of company so that they can easily assess the
position of company. Along with this, report also focuses on different phase that is 1 and 2 that
mainly focuses on analysing the strategic position of the company. For the present report the
selected organisation is WRSX group leading global advertisement company. Strategic analysis
of business environment mainly focuses on application of two different models that is VRIO and
PESTEL that mainly engage in analysing the internal and external environment respectively.
PHASE 1- STRATEGIC ANALYSIS OF THE WRSX GROUP SHOULD
INCLUDE THE FOLLOWING SECTIONS
1. The environment
Strategic analysis of business environment of WRSX group is performed using two tools
that are VRIO and PESTEL. These two analysis frameworks are used for internal and external
analysis respectively.
The internal analysis for WRSX group is performed as follows:
 V: Valuable: The current resources which are under company’s control are classified as
assets or liabilities. This decision regarding value of resources is made under this
question of the framework. When customer value of WRSX group is increased while
utilising these resources then, they are considered as valuable. It helps in making better
strategic plans which will help in utilisation of these resources (Barney and Hesterly,
2015).
 R: Rare: Often there are certain resources which are not available in plenty but can be
highly useful for the company. Only selected organisations are capable to purchase r
acquire such resources. WRSX group doesn’t have any sort of rare resources. Hence, the
company lacks chances of sustainable competitive advantage.
 I: Costly to imitate: Every company has its own unique processing methods. When other
competitors cannot imitate resources, then these are classified as costly to imitate. The
contributing conditions which classify resources as costly to imitate are ambiguity, social
complexity and historic conditions these have to be considered before certifying a
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resource as costly to imitate (Grant, 2016). Some employees and strategies can be
guarded under this category. WRSX’s international strategic plans have to be designed
with help of proper utilisation of these resources so that competition can be handled
effectively.
 O: Organised to capture value: Company cannot get any sort of profit or advantage
when resources are not managed effectively. Hence, they must be organised for capturing
great value. Policies and processes can be used for inculcating organised systems through
management strategies (Yates, 2012). This will help WRSX to enhance its culture and
inner potentials.
Strategic external analysis for the group is performed using PESTEL framework which is
evaluated ahead: P-Political: Influence of political policies and governmental actions on company’s
functioning structure is political factor of external environment. Government functions
with revenue collection. Fiscal policy, trade tariffs, restrictions and several other reforms
cause an adverse effect on strategies and action plans of the company. E-Economical: Economy is basic requirement of very business organisation. Investment
decisions are made according to changes in economic policies (Breja, Banwet and Iyer,
2016). Performance of WRSX is directly affected when great changes are made in
economic strategies. Income levels of consumers are also a part of economical factor
influencing the company. Tax policies and foreign direct investments lie under this
category. S-Social: Cultural acceptance of a marketing strategy proposed by WRSX is essential.
Social factors are made up of changes in demographics, cultural trends, populations,
changes in taste and demands, trending consumer preferences, etc. These factors have to
be considered while devising strategies of company. T-Technological: Technology is advancing with great pace. The company must also use
these technological developments in its marketing and global communication strategies.
It will enhance better coverage and improvements in its supply chain (Tidd and Bessant,
2014). Research and development policies are formulated by government. If WRSX
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invests in operations management and research techniques then company can grow at
higher rates. E-Environmental: Ecology and surrounding environment must not be affected by any
sort of action taken by the company. If any influence is felt then, appropriate
precautionary measure must be taken.
 L-Legal: Dominantly existing in both internal and external structure of the company.
Legislation are formulated by government to regulate functioning of every business
organisation irrespective of their ownership (St-Pierre and et. al., 2013). Hence, legal
factors are highly influential in designing strategies. In order to avoid complications in
near future, WRSX must follow all legal factors and policies.
Another strategic model used for analysing the competitive market is engaging in porter's
five force model. The first stage in model is assessing threat of new entrant in the market as the
WRSX is the leading global advertisement company in the industry. Therefore, there is high
threat of entrant in the industry. On the other hand, another factor on the porter's five force is
substitution of buyer that is very high in the market as there are large number of client and
customers that prefer to purchase the global advertisement service. Along with this bargaining
power of suppliers are also less in the industry.
Strategic Position of the company:
The business environment is strategically analysed as mentioned above by using VRIO
and PESTEL tool. The position of the company in international markets is quite weak because of
weak supplier relations and various demographic shifts. Changes in consumer behaviour have
also caused a lot of problems in strategic functioning of the company. WRSX has to develop
stronger roots in Europe and US so that better profit margins and customer share can be
acquired. Therefore, it is also stated that with the help of using above strategic analysis technique
they can easily measure both internal as well as external analysis.
2. WRSX and industry strategic capabilities
WRSX is an advertising agency which has to deliver its services in global markets. In
order to fight competitions effectively, the company must have certain strategic capabilities.
Innovation and creativity is an important strategic capability for the company. Operations
management and administration management technique are quite weak in case of WRSX. Clients
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get attracted to companies which are organised and well managed. Advertising industry survives
on client retention and innovative strategies (Hotho, Lyles, and Easterby‐Smith, 2015). When
both capabilities are managed in one single company then competition can be effectively fought.
WRSX group has some irreplaceable capabilities but needs to develop certain components for
developing its internal competencies.
Advertising industry offers huge success and growth opportunity and consumer base is
vary wide which provides opportunity to earn huge financial revenues and profitability. Many
researches have been done and it has been observed that some trends will dominate the
advertising industry. Currently this sector is in maturity stage and geographical market areas for
this industry are expanding. Digital marketing is a new trend that is currently increasing ion the
advertisement industry. Advertisement industry offers chance for doing highly profitable
business by rendering services through customer value chain through their subsidiary business.
Competition in the industry also is enhancing and it has become vital to value client relation ship
and give importance to sector knowledge.
3. Strategic purpose
Achieving sustainable business is the strategic purpose of WRSX group. They have been
rated extremely high for maintaining their corporate social responsibility. This implies that
purpose behind functioning of this group if partially served because it has been efficiently
running ethical practises with better approaches to society (Rosemann and vom Brocke, 2015).
But corporate governance is not admirable in structure of the company.
4. Cultural and its impact on WRSX strategy
Corporate culture is formed by behaviours and attitudes of employees working in a
company. It holds a great impact on current and future strategies of WRSX group. Human
resources are profit drivers of the company. Positive culture will enhance productivity and
profitability of these resources which will indirectly apply to better growth of the company.
Retention power is also increased when good and healthy culture is initiated (Grant, 2016). On
the other hand, non-respectful culture or negative working atmosphere will lead to declining
interests of employees towards work. Hence, culture has to be maintained with good employee
relationships so that negative impact is not felt on company’s current strategy.
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5. Environmental
Sustainability is a position where company has a balanced structure in coordination with
profits, people and ecology. Business environments are classified in two basic categories that are
internal and external. WRSX group’s manufacturing and service locations have to be changed. In
order to avoid extra costs which are incurred due to incorrect allocations and employment
problems, the company has to develop appropriate strategies (Harrison and John, 2013). These
will be in accordance with ecological balance and easy distribution access. Operations consist of
manufacturing and supply chain. Since, WRSX doesn’t maintain good relations with suppliers;
its sustainability issues cannot be resolved. Hence, the organisation has to take certain measures
in resolving these issues.
Conclusion
This strategic management report consists of basic analysis which is performed to get
clear picture of internal and external structure of WRSX groups’ organisation. With these
strategic frameworks, it is inferred that the company doesn’t hold much valuable resources and
needs to improve its core competencies so that competition can be tackled easily. Moreover,
purpose behind functioning of this agency creating a better place in advertising industry with
innovative and creative strategies. Hence, WRSX group has to take chance of its future
opportunities and defend itself from threats. Use of proper resources and effective action plans
regarding staff performance; will help in achieving and serving this purpose.
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PHASE 2- STRATEGIC CHOICES
WRSX (Waldron Roux Silberstien Xao) is leading advertisement agency within the
London that design advertisement as well as creative ideas for client company so that they may
easily enhance their marketing of products and services. The WRSX group design effective
advertisement for the company that results in enhancing their each in the global environment.
WRSX group will work with the objective to deliver excellent advertising and marketing
services for its business clients. Mission of the enterprise is to render innovative and effective
integrated brand marketing and public relations services for its consumers (Dess, McNamara and
Eisner, 2016). Therefore, in order to sustain the position in international advertising agency
WRSX group must focuses on evaluating different strategic choices that are available for cited
firm so that they could pursue to sustain in the global environment. Based on the above strategic
analysis of WRSX group there are different option available for the growth of company over the
next 3 years. The different strategic choices mainly include-
Business strategy
The foremost strategic choice that is available for advertising group include devising
effective business strategy so that company can easily accomplish the desired objectives. It is
simply defined as the long term planning of the business so that they can easily sustain in the
global environment (Harrison and John, 2013). Along with this, there are different forms of
business strategies that is been used by WRSX group over the next 3 years that mainly include
growth strategy as well as acquisition strategy. With the help of growth strategy WRSX global
advertisement group can easily introduce their new range of advertisement services for their
client company so that they can easily attain success in the market (Hubbard, Rice and Galvin,
2014). On the other hand, another business strategy that is used by cited firm include acquisition
strategy that ensure acquiring or purchasing another company to enhance their market share that
results in gaining the competitive advantage.
Business strategy may also include-
Geographic Segmentation- As per this segmentation criteria consumers will be selected and
targeted on the basis of place and location where they are living (Stead and Stead, 2013). This
segmentation criteria will support for identifying new market areas and consumer base for selling
advertising and marketing services of the entity (Morden, 2016).
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Demographic Segmentation- Buyers will be targeted on the basis of Age, sex, financial status,
occupation, marital status etc. This segmentation criteria will support for dividing the consumers
and marketing action plans and other strategies can be formulated on the the basis of this
segmentation criteria.
Corporate strategy
Another option that is available for WRSX group include engaging in devising corporate
level strategy that support the organization to engage in different operational activities that
support them in attaining the goals and objectives of the firm (Bromiley, Rau and McShane,
2014). In addition to this, corporate level strategy also benefit the advertisement company to
sustain its position in the industry. There are different strategical option available to the
customers it mainly include engaging in value creating strategy in which the key aim is to seek
the competitive edge with the help of enhancing their market share (Morden, 2016). With the
help of implementing this strategy company can easily add perceived value among their services
that they deliver to the different client company. In addition to this, engaging in the value
creating strategy it support the advertising company in reducing their overall cost by effectively
using the resources and capabilities of the corporation.
International strategy
Another strategic option or choice that is available for the WRSX group over that 3 years
include pursuing international strategy. With the help of using this strategy company can easily
implement the global expansion of their services so that they may easily meet the objectives and
requirement of different client company (Six Principles of Strategic Positioning, 2010).
International strategy may also defined as the global plan through which WRSX group can easily
perform business activities across the national boundaries. There are different international
strategies that is been used by cited firm over the next 3 years so that they can easily attain the
place in the global environment (Morschett, Schramm-Klein and Zentes, 2015). The key
international strategy used by WRSX group may include transnational strategy in which the
company would rely on the same brand names as well as services while engaging their operation
in the different other nation.
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Innovation and entrepreneurship
Another strategic choices that is available for the cited firm include innovation and
entrepreneurship that benefit the company to grow in the industry over the next 3 years. The
innovation strategy could be pursue by the WRSX group over the next years for sustaining in the
market it can be with the help of innovating the service line of the company (Barney and
Hesterly, 2015). With enabling the innovative services it might results in enhancing the overall
percentage of market share as it support in attracting the large number of clients towards their
advertising services. In addition to this, innovation strategy also include entailing the use of new
and up graded technological aspect for their client company so that they can easily meet the
requirement of client company.
On the other hand, another strategic choice that is available for the WRSX group include
engaging in the entrepreneurship strategy. It is considered as an effective approach that helps in
that helps individual to develop effective innovation strategy in relation to improve products or
services, WRSX Group which is an advertising company helps in promoting the strategy through
enhancing the market share of firm. Such strategy is also useful in terms of improving product
innovation and thus leads to improve business performance in market. However,
entrepreneurship strategy aims to be implemented in such form that helps in enhancing the
innovation and thus improve market share. Also they need to develop effective boundaries
through implementing focused based strategy which helps them to remain focused and does not
change even if the condition changes. Thus, such strategy would help them to improve their
performance in market. Thus, using such strategy aims to expand the business performance in
market and enhance sales and profitability of firm. Entrepreneurs are also focused upon
achieving set targets within limited time frame so that they can enhance overall performance of
firm in market. Thus, it leads to improve expansion and attain success. Through implementing
effective business strategy it aims to achieve organizational goals. Also, they should be remained
focused and does not affect from external factors that hinders their performance.
Mergers, acquisitions and alliances
Another strategic choice that is available for WRSX group over the next 3 years include
pursing different growth related strategies that is through enabling merger, acquisition and
alliances (Rothaermel, 2015). The key strategy that must be pursue by cited firm include
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engaging in merger activities with the another firm operating in the same industry so that they
can easily enhance the power within the industry. Along with this, it also benefit the company to
increase their control over the market by merging or collaborating with the similar other firm. On
the other hand, over the next 3 years the company could also pursue acquisition strategy that is
acquiring the whole firm so that they can easily dominate the market place and increase their
market share. In addition to this, selecting this strategic choice for WRSX group would results in
managing the financial risk (Mitchell and Leiponen, 2014). Whereas, another strategic choice
that is available for the cited firm include engaging in the alliance so that they can easily
accomplish the goals and objectives of firm as well as it also ensure growth over the next 3
years. The significance of using this strategic choice is that it support in coalition of the different
business entity so that they may easily acquire the control. The key purpose of this strategy is to
accomplish the goals and objectives related with both of the firm. On the other hand another
purpose of engaging in this strategy is related with leveraging resources.
CONCLUSION
From the above report it has been concluded that strategic management plays significant
role within the organization it mainly focuses on assessing the internal and external environment
so that they may easily provide the strategic direction to the company that assists in attaining the
goals and objectives. On the other hand, it also focuses on summarizing the phase 1 and phase 2
that mainly focuses on analysing the strategic position of company with the help of assessing the
environment. While the other phase summarises the strategic choices that is available for the
company that they may pursue in the next 3 years so that they may easily attain the growth.
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REFERENCES
Books and Journals
Barney, J. B. and Hesterly, W., 2015. Strategic management and competitive advantage
concepts and cases. Pearson.
Barney, J. B. and Hesterly, W., 2015. Strategic management and competitive advantage
concepts and cases. Pearson.
Breja, S. K., Banwet, D. K. and Iyer, K. C., 2016. Towards sustainable excellence: strategic
analysis of Deming Prize winning companies. The TQM Journal. 28(3), pp.390-410.
Bromiley, P., Rau, D. and McShane, M. K., 2014. Can strategic risk management contribute to
enterprise risk management? A strategic management perspective. 1.
Dess, G. G., McNamara, G. and Eisner, A. B., 2016. Strategic management: Creating
competitive advantages. McGraw-Hill Education.
Grant, R. M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley &
Sons.
Harrison, J. S. and John, C. H. S., 2013. Foundations in strategic management. Cengage
Learning.
Hotho, J. J., Lyles, M. A. and Easterby‐Smith, M., 2015. The mutual impact of global strategy
and organizational learning: current themes and future directions. Global Strategy Journal.
5(2), pp.85-112.
Hubbard, G., Rice, J. and Galvin, P., 2014. Strategic management. Pearson Australia.
Mitchell, W. and Leiponen, A., 2014. Virtual Special Issue on Innovation, Intellectual Property
and Strategic Management. Strategic Management Journal. 1.
Morden, T., 2016. Principles of strategic management. Routledge.
Morschett, D., Schramm-Klein, H. and Zentes, J., 2015. Strategic international management.
Springer.
Rosemann, M. and vom Brocke, J., 2015. The six core elements of business process
management. In Handbook on business process management 1 (pp. 105-122). Springer
Berlin Heidelberg.
Rothaermel, F. T., 2015. Strategic management. New York, NY: McGraw-Hill.
St-Pierre, J., Sanchez, R. M., Raymond, L. and Lacoursière, R., 2013. Configurations of
Strategic Capabilities and SME Performance: An Exploratory Study of the Influence of
National Context. Revue de l’Entrepreneuriat. 12(4), pp.79-102.
Stead, J. G. and Stead, W. E., 2013. Sustainable strategic management. ME Sharpe.
Tidd, J. and Bessant, J., 2014. Strategic innovation management. John Wiley & Sons.
Online
Six Principles of Strategic Positioning. 2010. [Online]. Available through: <
http://www.haigbedrossian.com/six-principles-of-strategic-positioning-m-porter/>.
[Accessed on 1st February 2017].
Concept of strategic choice. 2010. [Online]. Available through:
<http://businessofaccouting.blogspot.in/2010/04/concept-of-strategic-choice.html>.
[Accessed on 1st February 2017].
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